Mortgage growth is slowing in the city after soaring for 13 months due to government measures to control credit.

Mortgage loans extended in Shanghai in November increased by 70 million yuan from October, the People's Bank of China Shanghai headquarters said.

Of the new loans, around 30 million yuan went to newly built housing and 40 million yuan to second-hand houses.

Analysts said the mortgage slowdown was a result of the Shanghai real estate market cooling after the central bank took measures to control the over-expansion of credit.

The average price of an apartment in Shanghai dropped 6.36 percent from October to 7,731 yuan per sq m last month, and the turnover of new housing fell 11.4 percent to 2.05 million sq m, according to the China Real Estate Index System.

"More and more investors are holding off on purchase plans so they can benefit from government policies, which is leading to decreasing mortgages," said Shao Minghao, head of research at Hanyu Property.

"From my past experience, mortgages often drop at the end of the year because banks usually slow their loans business and increase mortgage repayments," said Shao.

Chen Cheng, director of China's real estate index, said next year's property market will depend on mortgage and taxation policy and whether supply has been effectively increased.

As the property and stock markets slow, large amounts of funds are flowing back to the banking system.

(China Daily December 12, 2007)